“Sales volume is typically lowest in January, so while sales fell further than normal, it is not a major cause for concern,” said Marr in the report. “Redfin agents in high-tax states reported that some buyers were hesitant in November and December given the uncertainty around tax reform, which passed in late December.”

“This uncertainty contributed to the drop in January home sales,” Marr added. “Potential move-up buyers are now reassessing whether it makes sense to list their homes in the face of higher mortgage rates and less favorable tax treatment for their next home.”

San Jose, San Francisco, Oakland, Seattle and Denver were the fastest and the most competitive markets in January. In San Jose, 50 percent of homes sold within 12 days and 75.5 percent of homes sold above asking price. In the other markets, homes sold in at least 16 days and at least 41.7 percent of homes sold above asking price.

Memphis experienced the highest home price growth at 24.6 percent year-over-year, bringing the median home sales price to $162,000. San Francisco had the second highest growth at 23.8 percent, followed by San Jose (21.6 percent), Baton Rouge (17.8 percent) and Seattle (15.4 percent).

Only 11 out of 73 metros experienced positive year-over-year sales growth. Salt Lake City, Utah led the way with 11.9 percent sales growth from January 2016.

Detroit experienced the largest year-over-year sales decline at 29.7 percent. Grand Rapids and Warren, Michigan also had double-digit drops at 29.1 percent and 28.4 percent, respectively.

San Jose had the largest drop in inventory (-43.6 percent), followed by Rochester (-37.5 percent), Buffalo, (-37.1 percent) and Atlanta (-35.4 percent).

Only Baton Rouge (16.7 percent) and Honolulu (7.6 percent) experienced increases in the number of homes for sale.

Methodology

The Redfin Real-Time Housing Market Tracker is a monthly analysis of home prices, competition, sales volumes and inventory levels across the markets that Redfin serves nationwide. The analysis is based on data from the Multiple Listing Services of which Redfin is a member. The monthly data may change after publishing as additional real estate transactions are recorded.